330 APPENDIX. 



2. To distribute last year's general standing orders or the 

 unclassifiable current expenses among departments in proportion 

 to the total days' work done in each department. 



3. To add this amount for each department to the sum of its 

 own expenses for the past year, as given by the cost of its 

 departmental standing order. 



4. To divide the gross amount thus obtained by the number 

 of direct days' work done in each department during the past 

 year, and so obtain a cost factor, say of $0.95 per day, by which 

 the cost of every day's direct work in the present year must be 

 increased in order to make it bear its most probable share of the 

 cost of facilities provided for it. 



Thus a man at $2.00 a day would be really costing $2.95, and 

 a bill as follows : 



1 5 days at $4.00 $60 oo 



6 " 2.50 1500 



27 " *-25 ' 33 75 



48 days $108 75 



would be increased by $45.60, representing 48 days x cost factor 

 of $0.95 per day. 



The variation of the factor measures the foreman's manage- 

 ment during the past year. Its amount is the cost of facilities 

 for doing a day's work which is chargeable to a particular job. 



VIII. 



COMPUTATION OF COST. 



Simple case gross cost. 



Our accounts may be on so simple a scale that we shall require 

 no more than a simple statement of the gross cost of executing 

 a given order. To obtain this, we add up the charges contained 

 on the service and material cards found in the pigeon-hole cor- 

 responding to the order in question. This gives the net cost. 

 This, increased by the sum of the products obtained by multi- 

 plying the number of direct days' work done on the order in 

 question in each department by the cost factor for that depart- 

 ment, and diminished by the sum of the credits, gives the gross 



